This is How We Performed As a Nation in First Month of Fiscal Year 2078/79

Nepal Rastra Bank, the central bank of Nepal, has unveiled the current macroeconomic and financial situation of Nepal based on the first month's data of 2021/22.

Inflation

The y-o-y consumer price inflation stood at 4.35 percent in the first month of 2021/22 compared to 3.49 percent a year ago. Food and beverage inflation stood at 3.86 percent whereas non-food and service inflation stood at 4.74 percent in the review month.

Import and Export

During the first month of 2021/22, merchandise exports increased 115.9 percent to Rs.20.76 billion compared to an increase of 8.9 percent in the same period of the previous year. Destination-wise, exports to India, China, and other countries increased 167.0 percent, 47.8 percent, and 17.5 percent respectively. Exports of soyabean oil, palm oil, polyester yarn & thread, juice, oil cake, among others increased whereas exports of cardamom, medicine (ayurvedic), herbs, wire, readymade leather goods, among others decreased in the review period.

During the first month of 2021/22, merchandise imports increased 75.7 percent to Rs.150.73 billion against a decrease of 19.6 percent a year ago. Destination-wise, imports from India, China, and other countries increased 58.7 percent, 87.6 percent, and 120.8 percent respectively. Imports of petroleum products, transport equipment & parts, crude soyabean oil, M.S. billet, gold, among others increased whereas imports of chemical fertilizer, cement, tobacco, aircraft spare parts, readymade garments among others decreased in the review period.

The trade deficit increased 70.6 percent to Rs.129.97 billion during the first month of 2021/22. Such a deficit had decreased 22.2 percent in the same period of the previous year. The export-import ratio increased to 13.8 percent in the review period from 11.2 percent in the same period of the previous year.

Services and Remittance

Net services income remained at a deficit of Rs.10.12 billion in the review period compared to a deficit of Rs.3.09 billion in the same period of the previous year.

Remittance inflows decreased 18.1 percent to Rs.75.96 billion in the review period in contrast to an increase of 23.0 percent in the same period of the previous year. In the US Dollar terms, remittance inflows decreased 17.5 percent to Rs.638.2 million in the review period against a growth of 14.5 percent in the same period of the previous year.

Price of Oil and Gold

The price of oil (Crude Oil Brent) in the international market increased 56.2 percent to US Dollar 70.07 per barrel in mid-August 2021 from US Dollar 44.86 per barrel a year ago. The price of gold decreased 8.1 percent to US Dollar 1786.35 per ounce in mid-August 2021 from US Dollar 1944.75 per ounce a year ago.

Exchange Rate

Nepalese currency vis-à-vis the US Dollar appreciated 0.5 percent in mid-August 2021 from mid-July 2021. It had appreciated 0.7 percent in the same period of the previous year. The buying exchange rate per US Dollar stood at Rs.118.50 in mid-August 2021 compared to Rs.119.04 in mid-July 2021.

Banking

Deposits at Banks and Financial Institutions (BFIs) decreased 1.6 percent in the review period compared to a decrease of 0.1 percent in the corresponding period of the previous year. On y-o-y basis, deposits at BFIs expanded 19.6 percent in mid-August 2021.

Meanwhile, the private sector credit from BFIs increased 1.2 percent in the review period compared to a decrease of 0.5 percent in the corresponding period of the previous year. On y-o-y basis, credit to the private sector from BFIs increased 29.4 percent in midAugust 2021.

Interest Rates

The average base rate of commercial banks decreased to 6.71 percent in the first month of 2021/22 from 8.08 percent a year ago. The weighted average deposit rate and lending rate of commercial banks stood at 4.76 percent and 8.48 percent respectively in the review month. Such rates were 5.77 percent and 10.47 percent respectively a year ago.